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(1)	Elect a Board of Directors;

(2)	Consider and vote on an advisory proposal on the ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accountant for 2014;

(3)	Consider and vote on approval of the material terms of performance goals under the Company’s Executive Performance Plan;

(4)	Consider and vote on an advisory proposal on the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement; and

(5)	Consider and act upon such other business as may be properly brought before the meeting.

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1.	Election of the director nominees listed on page 8 (“Nominees”); and

2.	Advisory vote on the ratification of the selection of Deloitte & Touche LLP as the Company’s independent registered public accountant for 2014.

3.	Approval of the material terms of performance goals under the Company’s 2014 Executive Performance Plan; and

4.	Advisory proposal on the compensation of the Company’s Named Executive Officers, as disclosed in this Proxy Statement.

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•	Complete, sign and date your proxy card and return it no later than the commencement of the Annual Meeting in the postage-paid envelope provided;

•	Call the toll-free telephone number on your proxy card and follow the recorded instructions no later than 10:59 p.m. Central Time on Tuesday, May 6, 2014;

•	Access the proxy voting website identified on your proxy card and follow the instructions no later than 10:59 p.m. Central Time on Tuesday, May 6, 2014; or

•	Attend the Annual Meeting in person and deliver your proxy card or ballot to one of the ushers when requested to do so.

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•	Deliver another signed proxy card with a later date anytime prior to the commencement of the Annual Meeting;

•	Notify Kemper’s Secretary, C. Thomas Evans, Jr., in writing prior the commencement of the Annual Meeting that you have revoked your proxy;

•	Call the toll-free telephone number, or access the proxy voting website, identified on the proxy card and re-vote any time prior to 10:59 p.m. Central Time on Tuesday, May 6, 2014; or

•	Attend the Annual Meeting in person and deliver a new signed proxy or ballot to one of the ushers when requested to do so.

•	Deliver another signed proxy card with a later date prior to the 401(k) Deadline; or

•	Call the toll-free telephone number, or access the proxy voting website, identified on the proxy card and re-vote anytime prior to the 401(k) Deadline.

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•	Contact Kemper Investor Relations by telephone at 312.661.4930, or by e-mail at investor.relations@kemper.com.

•	Write to Kemper at One East Wacker Drive, Chicago, Illinois 60601, Attention: Investor Relations.

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(1)

The shares shown for directors and all executive officers as a group include shares beneficially owned by (i) all directors, (ii) all NEOs, and (iii) all other executive officers of the Company. The numbers of shares shown for directors other than Mr. Southwell include vested deferred stock units (“DSUs”), and the numbers of shares shown for NEOs and other executive officers include unvested outstanding shares of restricted stock. For each director other than Mr. Southwell, the number of shares shown includes 500 DSUs. For each NEO and for the executive officers as a group, the number of shares shown includes the following numbers of restricted stock shares: Southwell (30,000); Sodaro (5,250); Renwick (7,000); Konar (6,000); Lynch (7,000) and for all Executive Officers as a group (66,450). Awards of restricted stock units (“RSUs”) were granted in lieu of restricted stock, effective February 2014; unvested RSUs are not included in the amounts shown in this table because they are not deemed beneficially owned shares of Common Stock under applicable SEC rules.

(2)

The percentages shown for any individual and for the directors and executive officers as a group are based on the number of shares outstanding on March 10, 2014, plus shares that the respective individual or the group has the right to acquire through the exercise of stock options that are currently vested or that will vest on or before May 9, 2014. An asterisk in this column indicates ownership of less than 1% of the outstanding Common Stock. Each outstanding share of Common Stock includes an attached right under the Company’s shareholder rights plan adopted August 4, 2004 (the “Rights Plan”). Among other provisions of the Rights Plan, if any person or group beneficially owns 15% or more (22% or more in the case of the Company’s existing stockholder, Singleton Group LLC, and certain related persons) of the Common Stock without approval of the Board of Directors, then each shareholder (other than the non-approved acquirer and its affiliates and transferees) would be entitled to buy Common Stock having twice the market value of the exercise price of the rights, which has been set at $150 per share.

(3)

The shares shown for Mr. Vie include 12,000 shares held by his spouse and 4,164 shares held by trusts that he is deemed to beneficially own. In addition, 22,012 of the shares shown are pledged as collateral for a mortgage loan under an arrangement in existence before February 1, 2013, the date that the Company adopted a policy prohibiting all directors and employees who receive equity-based compensation from the Company from entering into any new arrangements

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(4)	The number of Common Shares shown is based on information reported as of February 4, 2013 in a Form 4 filed by Mr. Vigneau on February 5, 2013.

(1)	Based on the number of shares outstanding on March 10, 2014. Each outstanding share of Common Stock includes an attached right under the Company’s Rights Plan. See footnote (2) to the table in the preceding section entitled “Directors and Executive Officers.”

(2)

Based on information reported in a Form 4 filed with the SEC on January 10, 2014, the Singleton Group LLC (“LLC”) directly owns 8,884,520 shares of Common Stock. As reported in a Schedule 13D/A filed with the SEC on October 7, 2013, the LLC and Christina Singleton Mednick, William W. Singleton and Donald E. Rugg, as managers of the LLC, share voting and dispositive power with respect to the shares of Common Stock held by the LLC, and so may be deemed beneficial owners of all such shares. William W. Singleton and Christina Singleton Mednick reported having indirect interests in these shares as trustees and beneficiaries of certain trusts holding membership interests in the LLC and as managers of the LLC and disclaimed beneficial interest of the shares of Common Stock held by the Singleton Group LLC except to the extent of their respective pecuniary interests therein. The Schedule 13D/A reported that Donald E. Rugg has sole voting and dispositive power with respect to 389 shares of Common Stock. As a result of these shares beneficially owned outside of the LLC and his role as a manager of the LLC, Donald E. Rugg may be deemed a beneficial owner of 8,884,909 shares of Common Stock, which constitutes 16.0% of the Common Stock.

(3)

Based on information reported in a Schedule 13G/A filed with the SEC on February 10, 2014, Dimensional Fund Advisors LP (“Dimensional”) beneficially owns an aggregate of 4,195,840 shares of Common Stock as of December 31, 2013, as to which Dimensional has sole dispositive power and which includes 4,114,451 shares as to which it has sole voting power. According to the Schedule 13G/A, these shares are held by four investment companies to which Dimensional furnishes investment advice and certain other commingled group trusts and separate accounts for which Dimensional serves as investment manager. Dimensional disclaimed beneficial ownership of these shares.

(4)

Based on information reported in a Schedule 13G/A filed with the SEC on February 12, 2014, T. Rowe Price Associates, Inc. (“T. Rowe Price”) is deemed to be the beneficial owner of 3,798,168 shares of Common Stock as of December 31, 2013, as to which T. Rowe Price has sole dispositive power and which includes 704,954 shares as to which it has sole voting power. According to information provided to the Company by T. Rowe Price, these shares are owned by various individual and institutional investors to which T. Rowe Price serves as an investment adviser with power to direct investments and/or sole power to vote the shares. T. Rowe Price disclaimed beneficial ownership of these shares.

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(5)

Based on information reported in a Schedule 13G/A filed jointly with the SEC on February 7, 2014 by Fayez Sarofim, Fayez Sarofim & Co., Sarofim Trust Co. and Sarofim International Management Co., Fayez Sarofim may be deemed to be the beneficial owner of 3,545,498 shares of Common Stock. Of such shares, Fayez Sarofim reported sole voting and dispositive power as to 2,469,070 shares, shared voting power as to 999,344 shares and shared dispositive power as to 1,076,428 shares.

(6)

Based on information reported in a Schedule 13G/A filed with the SEC on January 29, 2014, BlackRock, Inc. (“BlackRock”) beneficially owns an aggregate of 3,364,611 shares of Common Stock as of December 31, 2013, as to which BlackRock has sole dispositive power and which includes 3,152,920 shares as to which it has sole voting power. BlackRock also reported that it was filing as the parent holding company or control person of certain subsidiaries listed in an exhibit to the Schedule 13G/A.

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(1)

Fees shown in this column were earned for service on the Board and/or Board committees, and include amounts deferred at the election of an individual Board member under the Kemper Corporation Nonqualified Deferred Compensation Plan. For more information about the Deferred Compensation Plan, see the narrative discussion in the Executive Compensation section under the heading Deferred Compensation Plan on page 41.

(2)

The amounts shown in this column represent the aggregate grant date fair values of the stock option and DSU awards granted on May 1, 2013 to the designated non-employee directors. The grant date fair values were estimated for stock options based on the Black-Scholes option pricing model, and for DSUs were based on the grant date closing price ($31.50) per share of Common Stock. For a discussion of valuation assumptions, see Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. Additional information about director stock option grants is provided on page 12 below in the narrative following the table captioned “2013 Annual Non-Employee Director Compensation Program.”

*	This number represents stock option shares granted under the applicable equity-based compensation plans of the Company to Mr. Vie prior to 2010 when he was an employee of the Company.

(3)

The amount shown in this column represents the Company's (i) incremental costs to provide office relocation and support assistance to Mr. Vie during 2013 in the aggregate amount of $34,200, and (ii) matching contributions of $16,562 made for Mr. Vie in 2013 pursuant to its “Matching Gifts to Education Program.” Under the matching gifts program, the Company will match tax deductible donations of up to $10,000 made to eligible educational institutions by employees, directors and retirees of the Company on a $2-for-$1 basis up to an aggregate of $20,000 per donor for donations in any one year.

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(4)	Effective May 1, 2013, Reuben Hedlund and Fayez Sarofim retired from the Board and Christopher Sarofim was elected to the Board. The amount shown in this column for Mr. Hedlund includes a one-time service recognition award of $90,000 in connection with his retirement from the Board.

(1)	Meeting attendance fee is $2,000 for each Audit Committee Meeting attended on a day other than a day when the Board of Directors meets.

(2)	Meeting attendance fee is $3,000 for each Investment Committee Meeting attended on a day other than a day when the Board of Directors meets.

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•	Corporate Governance Guidelines

•	Charters of the Following Committees of the Board of Directors:

•	Code of Business Conduct and Ethics

•	Code of Ethics for Senior Financial Officers

•	Director Independence Standards

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(1)	Committee Chair

(2)	Action was also taken by unanimous consent in lieu of meetings one time by the Compensation Committee and five times by the Executive Committee in 2013.

•	the integrity of the Company’s financial statements;

•	the Company’s compliance with legal and regulatory requirements;

•	the independent registered public accountant’s qualifications, independence and performance; and

•	the performance of the Company’s internal audit function.

•	reviewing and approving corporate goals and objectives relevant to the compensation of the Company’s Chief Executive Officer (“CEO”), evaluating the CEO’s performance and compensation in light of such goals and objectives, and setting the CEO’s compensation based on such evaluation;

•	overseeing the compensation of the Company’s executive officers and other members of senior management as may be designated by the committee from time to time, including the review and approval of their base salaries, bonuses and equity awards;

•	reviewing and making recommendations to the Board of Directors regarding the Company’s incentive compensation and equity-based compensation plans;

•

setting performance criteria, and certifying the results thereof, for cash bonuses under the Company’s 2009 Performance Incentive Plan (“Performance Incentive Plan”) and the Executive Performance Plan (“Executive Performance Plan”) approved in February 2014 for awards that are intended to qualify as performance-based compensation under the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder (“Internal Revenue Code”);

•	reviewing and approving the material terms of any employment agreements or severance or change-in-control arrangements involving any of the Company’s executive officers;

•

approving award recipients and determining the terms of awards under the Omnibus Plan (with the limited exception of awards granted by the Special Equity Grant Committee pursuant to its delegated authority) and administering the Omnibus Plan and its predecessor plans, the 1995 Non-Employee Stock Option Plan (“Director Option Plan”), the 1997 Stock Option Plan (“1997 Option Plan”), the 2002 Employee Stock Option Plan (“2002 Option Plan”), and the 2005 Restricted Stock and Restricted Stock Unit Plan (“Restricted Stock Plan”);

•	reviewing and making recommendations to the Board of Directors on director compensation; and

•	reviewing and discussing with management the Compensation Discussion and Analysis section of the Company’s annual proxy statement and approving the related Compensation Committee Report.

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•	certain powers which, under Delaware law, may be exercised only by the full Board of Directors; and

•	such other powers as may be granted to other committees by resolution of the Board of Directors or as defined in the charters of such committees.

•	identifying potential candidates qualified to become Board members and recommending director nominees to the Board in connection with each annual meeting of shareholders;

•	developing and assessing principles and guidelines for corporate governance, executive succession, business conduct and ethics and recommending their adoption and periodic revision to the Company’s Board of Directors;

•	leading the Board of Directors in its annual review of the Board’s performance; and

•	recommending to the Board director nominees, chairs for each Board committee and an independent Board member to serve as Lead Director.

•	The highest ethical standards and integrity.

•	Must be willing and able to devote sufficient time to the work of the Board.

•	Must be willing and able to represent the interests of shareholders as a whole rather than those of special interest groups.

•	No conflicts of interest that would interfere with performance as a director.

•	A reputation for working constructively with others.

•	A history of achievement at a high level in business or the professions that reflects superior standards.

•	Possess qualities that contribute to the Board’s diversity.

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•	components with significant at-risk compensation based on a mix of short-term and long-term goals;

•	cash bonus program with annual and 3-year performance-based awards;

•	equity-based compensation program with 3-year performance-based restricted stock/RSUs and stock options;

•	grant agreements with executive officers that include:

(i)	clawback clauses for the recoupment or forfeiture of compensation in the event of certain accounting restatements or as otherwise required by law; and

(ii)	a double-trigger standard conditioning payout on involuntary or constructive discharge in the event of a change-in-control

•	no excise tax gross-ups; and

•	policies prohibiting directors and employee recipients of equity-based compensation awards from participating in:

(i)	hedging transactions that would limit their risks from decreases in the price of the Company’s Common Stock; and

(ii)	pledging arrangements involving Company securities, as described in more detail in footnote 3 to the beneficial ownership table on page 6.

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•	performance-based cash awards tied to achieving key annual and multi-year financial performance metrics such as growth in Earned Premiums, Profit Margins and Return on Equity;

•	performance-based restricted stock/RSU awards tied exclusively to the performance of Kemper’s total shareholder return (“TSR”) relative to a peer group; and

•	stock option awards tied to achieving absolute long-term appreciation in the price of the Company’s Common Stock.

(1)	Based on the closing price ($39.34) of a share of Common Stock on March 10, 2014.

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(2)	Effective February 2014, awards of performance-based RSUs replaced restricted stock. Unlike restricted stock, RSUs are not considered beneficially owned shares of Common Stock and accordingly are not included in the ownership tables in this Proxy Statement.

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•	Reward results through long-term incentives with contingent value based on stock performance, while closely monitoring senior management’s stock retention;

•

Consider, with the assistance of its independent compensation consultant, industry data on levels of executive compensation for certain specific positions at similar companies in the insurance industry to assess the extent to which the Company’s practices may vary from industry practices and determine whether any noted variances are reasonable, appropriate and purposefully designed to successfully attract and retain skilled executives in a highly competitive marketplace; and

•	Obtain a clear understanding of the business strategies and objectives of the Company, and the reasoning and recommendations of senior management for motivating their key subordinates. The Compensation Committee believes it is important and appropriate to give serious consideration to the views of senior management who run the Company and supervise its key managerial employees.

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•	Annual PIP Award—under which a participant is given the opportunity to earn a cash bonus based on the results of performance criteria measured over a performance period of one year or less.

•	Multi-Year PIP Award—under which a participant is given the opportunity to earn a cash award based on the results of one or more performance criteria measured over a performance period of more than one year (generally three years).

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•	Receive at the Company’s cost basic life and accident insurance coverage in an amount equal to the individual’s annual base salary up to a maximum of $400,000, business travel insurance in an amount based on the individual’s annual base salary up to a maximum of $200,000, and short-term disability coverage for up to 26 weeks; and

•	Are eligible to participate in the Company’s employee welfare benefit plans that provide typical offerings such as health and dental insurance, health and dependent care reimbursement accounts, supplemental life, accident and long-term disability insurance.

•	Tax-qualified retirement plans applicable to all full-time salaried employees, including executive officers, meeting age and service-based eligibility requirements; this includes the Company’s defined benefit pension plan (“Pension Plan”) for employees hired prior to 2006, and the Company’s defined contribution retirement plan (“DC Plan”) for employees hired on or after January 1, 2006;

•

Non-qualified supplemental retirement plans, including the Company’s non-qualified supplemental defined benefit pension plan (“SERP”) and non-qualified supplemental defined contribution retirement plan (“DC SERP”), available to key employees designated annually by the Board of Directors to provide benefits using the same formulas used for the respective tax-qualified retirement plans but without regard to the limits imposed under the Internal Revenue Code; and

•	Voluntary 401(k) plan participation which includes a Company matching contribution feature offered to all full-time salaried employees, including executive officers, meeting age and service-based eligibility requirements.

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(1)

The amounts included in the “Salary” column represent base salary earned for each of years 2013, 2012 and 2011. Pursuant to the Company’s regular compensation cycle, salary adjustments for any particular year take effect on April 1 of such year. As a result, for any year in which an individual officer’s salary was increased or decreased, one quarter of the amount of salary shown for such year was earned at the rate in effect for the prior year and three quarters of the amount shown was earned at the new rate implemented for such year. However, the amount shown for Mr. Sodaro includes a salary adjustment that took place March 22, 2013 in connection with his promotion. The amount shown for Mr. Vigneau for 2013 is the salary earned for the portion of the year that he was employed by the Company. None of the NEOs elected to defer compensation earned in such years under the Deferred Compensation Plan. See the narrative discussion below under the caption “Deferred Compensation Plan” for more information about the plan.

(2)	The amounts included in the “Bonus” column for Messrs. Renwick and Vigneau represent a discretionary cash bonus for 2011 that was paid in 2012.

(3)

The amounts included in the “Stock Awards” column represent the aggregate grant date fair values of the performance-based restricted stock awards granted under the Omnibus Plan in 2013, and under the Restricted Stock Plan in 2012 and 2011, to the designated NEOs. A Monte Carlo simulation method was used to estimate the fair values of the awards on the grant date. For a discussion of valuation assumptions, see Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. These shares of performance-based restricted stock are subject to forfeiture and transfer restrictions until they vest in accordance with their respective grant agreements. Based on the Monte Carlo simulation, the grant date fair values of the performance-based restricted stock granted on February 2, 2013, January 31, 2012 and February 1, 2011 were determined to be $42.12, $36.65 and $39.83 per share, respectively. If achievement of the performance conditions at the maximum performance level is assumed, the aggregate number and market value of the payouts of performance-based restricted stock would be as follows under awards granted in 2013 to each NEO:

(4)

The amounts included in the “Option Awards” column represent the aggregate grant date fair values of the stock option awards granted to the designated NEOs pursuant to the Omnibus Plan in 2013 and the 2002 Option Plan in 2012 and 2011. The Black-Scholes option pricing model was used to estimate the fair value of each option (including its tandem stock appreciation right) on the grant date. For a discussion of valuation assumptions, see Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. The awards shown for Mr. Vigneau were forfeited upon the separation of his employment with the Company.

(5)

The amounts included in the “Non-Equity Incentive Plan Compensation” column represent performance incentive awards earned under the Company’s Performance Incentive Plan for 2013, 2012 and 2011 Annual PIP Awards, which were paid in 2014, 2013 and 2012, respectively, and for 2011 and 2010 Multi-Year PIP Awards paid in 2014 and 2013, respectively. For Mr. Konar, this amount for 2013 includes $180,149 earned under his 2013 Annual PIP Award and $210,455 earned under his 2011 Multi-Year PIP Award.

(6)

The amounts included in this column represent the change in value for each participating NEO under the Company’s Pension Plan and SERP as of December 31 of 2013, 2012 and 2011 from the value at the end of the prior calendar year, and for Mr. Konar, also include deferred compensation earnings. The year-to-year changes in pension value are due primarily to normal, annual retirement cost which incorporates an additional year of service and interest cost, but also reflects annual changes in salary and bonus.

(7)	The amounts included in the “All Other Compensation” column represent Company matching contributions of $7,650 to the accounts under the Company’s 401(k) Plan for the NEOs other than Mr. Vigneau and $2,643 for Mr. Vigneau. None of the

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(1)

These columns show the range of payouts that were possible for Annual PIP Awards and Multi-Year PIP Awards granted under the Performance Incentive Plan in 2013, which represent the percentages of the respective officer’s 2013 annual base salary applicable to specified performance levels. The “Threshold” level is the minimum level of performance that must be met before any payout may occur. The amounts estimated for Multi-Year PIP Awards are based on an average of 2013, 2014 and estimated 2015 annual base salaries. Base salaries for 2015 were estimated at their 2014 rates. The amounts actually paid out under the Annual PIP Awards granted on February 4, 2013 and the Multi-Year PIP Awards granted on February 1, 2011 are shown above in the Summary Compensation Table under the “Non-Equity Incentive Plan Compensation” column for 2013.

(2)

These columns show the range of payouts possible under the performance-based restricted stock awards granted under the Omnibus Plan in 2013. The amount shown in the “Target” column for each individual represents 100% of the shares granted, which equals the number of shares that would vest if the “Target” performance level is achieved. The amount shown in the “Threshold” column for each individual is 50% of the “Target” payout amount. The amount shown in the “Maximum” column for each individual is 200% of the “Target” payout amount. Further information about these awards is provided under the caption Performance-Based Restricted Stock Awards in 2013 in the Compensation Discussion and Analysis section on page 30.

(3)	These are original options awards, granted on the date the awards were approved by the Compensation Committee. All options granted in 2013 were non-qualified options for federal income tax purposes and represent original option awards made to the NEOs by the Compensation Committee under the Omnibus Plan.

(4)	The exercise price of the stock option awards is equal to the closing price of a share of Common Stock on the grant date.

(5)

The amounts shown represent the aggregate grant date fair values of the 2013 stock option and restricted stock awards. For stock options, the grant date fair values were estimated based on the Black-Scholes option pricing model. For performance-based restricted stock, the grant date fair values were estimated using the Monte Carlo simulation method. Based on the Monte Carlo simulation, the grant date fair values of the performance-based restricted stock granted on February 4, 2013 was determined to be $42.12. For a discussion of valuation assumptions, see Note 9 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

(6)	Because the 2013 Annual and Multi-Year PIP Awards granted to Messrs. Konar are based on multiple components, with portions of each award based on varying performance criteria, the amounts shown in the “Threshold” column for him represent the

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(1)	These options are scheduled to vest on 8/1/2014.

(2)	These options are scheduled to vest ratably in equal increments on 7/31/2014 and 7/31/2015.

(3)	These options are scheduled to vest ratably in equal increments on 8/4/2014, 8/4/2015 and 8/4/2016.

(4)

These shares of performance-based restricted stock are scheduled to vest on 1/31/2015. The number of shares shown represents the target number of shares that were granted because the estimated performance results were below the target levels for the portion of the 3-year performance period ending on December 31, 2015 that was completed as of December 31, 2013. Market value of these shares was determined using the closing price ($40.88) per share of Common Stock on December 31, 2013.

(5)

These shares of performance-based restricted stock are scheduled to vest on 2/4/2016. The number of shares shown represents the maximum number of shares that could be granted for performance at or exceeding the maximum performance level because the estimated performance results exceeded the target levels for the portion of the 3-year performance period ending on December 31, 2014 that was completed as of December 31, 2013. Market value of these shares was determined using the closing price ($40.88) per share of Common Stock on December 31, 2013.

(6)	These are time-based restricted stock awards that were granted to Mr. Sodaro before he was elected Chief Financial Officer.

(7)	These awards are scheduled to vest on 8/1/2014.

(8)	These awards are scheduled to vest ratably in equal increments on 7/31/2014 and 7/31/2015.

(9)	These awards are scheduled to vest ratably in equal increments on 8/4/2014, 8/4/2015 and 8/4/2016.

(1)	The number of shares acquired from option/SAR exercises shown in these columns are the gross number of shares issued in the exercise transactions without deduction of any shares surrendered or withheld to satisfy the exercise price and/or tax withholding obligations related thereto. (See the narrative discussion above under the caption “Grants of Plan-Based Awards.”) Taking into

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(2)	“Value Realized on Exercise” represents the difference between the exercise price of the shares acquired and the market price of such shares on the date of exercise, without regard to any related tax obligations.

(3)	The number of shares acquired on vesting of stock awards are the gross number of shares issued without deduction for any shares withheld to satisfy tax withholding obligations. Taking into account such withheld shares, the actual net increase in the number of shares issued to these officers was as follows: Southwell (11,528); Sodaro (1,481); Renwick (2,209); Konar (1,758); and Lynch (13,280).

(4)	“Value Realized on Vesting” represents the market value of the shares acquired on the date of vesting, without regard to any related tax obligations. Market value was determined using the closing price per share of Common Stock on the vesting date.

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(1)

These accumulated benefit values are based on the years of credited service shown and the Average Monthly Compensation as of December 31, 2013, as described above in the narrative on the Pension Plan preceding this table. These present value amounts were determined on the assumption that the NEOs have been or will remain in service until age 65, the age at which retirement may occur under the Pension Plan and SERP without any reduction in benefits, using the same measurement date, discount rate assumptions and actuarial assumptions described in Note 16 to the consolidated financial statements included in the Company’s 2013 Annual Report on Form 10-K. The discount rate assumption was 4.90% for 2013 and the mortality assumptions were based on the RP-2000 Combined Healthy Male Projected to 2013 Table.

(2)

As required by applicable SEC rules, this table provides information about benefits under the Company's Pension Plan and SERP, and does not cover defined contribution plans such as the Company's DC Plan and DC SERP. As with other employees who join the Company after January 1, 2006, Ms. Lynch and Mr. Vigneau were eligible to participate in the DC Plan and DC SERP rather than the Pension Plan and SERP.

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(1)	The balance shown in this column represent the balance for Mr. Konar based on prior deferrals plus earnings or losses accrued through December 31, 2013.

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(2)

The amounts shown assume that the Board of Directors elected to accelerate the vesting of outstanding stock options and restricted stock shares as of December 31, 2013. The amounts shown represent the value of the stock options and restricted stock that would have been subject to accelerated vesting as of December 31, 2013. The total numbers and market values of unvested restricted stock awards and of shares subject to unvested stock options, and the exercise prices thereof, are set forth in the Outstanding Equity Awards at 2013 Fiscal Year-End table. The accelerated stock option and restricted stock values shown were calculated using the closing price ($40.88) of a share of Common Stock on December 31, 2013.

(3)

For the three-year performance period ending on December 31, 2013, the value included in the table represents 100% of a payout at the target performance level. For the three-year performance period ending on December 31, 2014, the value included in the table represents two-thirds of a payout at the target performance level. For the three-year performance period ending on December 31, 2015, the value included in the table represents one-third of a payout at the target performance level.

(4)

The amounts shown represent estimated values of payouts under the 2013 Annual PIP Awards resulting from a hypothetical termination event as of December 31, 2013. The amount of the payout would have been the greater of the payout due based on the actual performance results or at the target performance level. For all NEOs other than Mr. Konar, the payout due based on actual performance results exceeded the payout at the target performance level, entitling them to receive the payout whether there was or was not a termination event on December 31, 2013. Accordingly, no additional payout is included in the table. For Mr. Konar, the payout due based on actual performance results was lower than the payout at the target performance level. Accordingly, the excess of the payout at the target performance level over the payout due based on actual performance results is included in the table. The processes for determining Annual PIP Award payouts under possible termination events are described in the narrative preceding this table.

(5)

The amounts shown represent estimated values of payouts under the 2011, 2012 and 2013 Multi-Year PIP Awards resulting from a hypothetical termination event as of December 31, 2013. The amount of the payout for each award would have been the greater of the payout due based on the actual performance results or at the target performance level. The payout under the 2011 Multi-Year PIP Award for all NEOs other than Mr. Konar was zero based on actual performance results, so the entire target level payout is included in the table. In the case of Mr. Konar, no payment is included in the table for his 2011 Multi-Year Award because the actual performance results exceeded the target performance level, entitling him to receive the payout whether there was or was not a termination event on December 31, 2013. For the 2013 and 2012 Multi-Year PIP Awards for all NEOs, the amounts included in the table represent, respectively, two-thirds of an estimated payout at the target performance level for the three-year performance period ending on December 31, 2014 and one-third of an estimated payout at the target performance

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(6)	The amounts shown are the estimated costs to the Company to provide continuation of life and health insurance benefits for up to three years (in the case of Mr. Southwell) or two years (for the other NEOs) and outplacement services for fifty-two weeks pursuant to the Severance Agreements.

(7)

The amounts shown are reductions in the amounts of total payments to the respective NEOs estimated to result from a hypothetical change in control as of December 31, 2013 pursuant to a provision in their Severance Agreements that would require such reductions to ensure that the payments would not be subject to excise taxes under Sections 4999 and 280G of the Internal Revenue Code. This estimate was determined using safe harbors contained in regulations to Section 280G; however, whether actual payments would or would not be subject to Sections 4999 and 280G of the Internal Revenue Code would have been determined based on the specific facts of the actual transaction resulting in a change of control.

(8)

Acceleration of the vesting of stock options awarded on or after February 1, 2005 (including restorative options granted in connection with the exercise thereof), and of the vesting of all restricted stock, would occur automatically upon the death or disability of the restricted stockholder pursuant to the terms of the applicable plans and grant agreements. Vesting of stock options granted to NEOs as original awards prior to February 1, 2005 (and restorative options granted in connection with the exercise thereof), would not accelerate on the death or disability of the option holder under the terms of the applicable plans and grant agreements. The amounts shown represent the value of the stock options and restricted stock that would have been subject to accelerated vesting as of December 31, 2013. The total numbers and market values of shares subject to unvested stock options, and the exercise prices thereof, and of unvested restricted stock awards are set forth in the Outstanding Equity Awards at 2013 Fiscal Year-End table on page 38. The accelerated stock options and restricted stock values shown were calculated using the closing price ($40.88) of a share of Common Stock on December 31, 2013.

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•	cash and equity-based compensation awards tied to 3-year performance metrics

•	executive officer awards with clawback clauses and double-trigger change-in-control terms

•	no excise tax gross-ups

•	policies prohibiting hedging and new pledging transactions

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1)	BCAR derived allocation factors are specifically determined by business unit.

2)	Specifically identified GAAP balances are allocated to operating equity.

3)	Remaining balances, investment capital and investment income are allocated using factors determined in step 1.

1)	Net Operating Income shall exclude Net Investment Income to the extent the Net Investment Income relates to excess capital as determined on a basis consistent with the Allocated Equity Model.

2)	Kemper Home Service Companies’ fire dwelling product line’s earned premiums will be included in the calculation of Premium Revenue Growth rates for the 2013 Multi-Year PIP Awards. This adjustment does not apply to Reserve National.

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1)	BCAR derived allocation factors are specifically determined by business unit.

2)	Specifically identified GAAP balances are allocated to operating equity.

3)	Remaining balances, investment capital and investment income are allocated using factors determined in step 1.

a)	Net Operating Income shall exclude Net Investment Income to the extent the Net Investment Income relates to excess capital as determined on a basis consistent with the Allocated Equity Model.

b)	The amount of Total Losses & LAE included in the calculation of GAAP Net Operating Income for purposes of the 2013 Multi-Year Incentive Awards shall be adjusted for CAT losses so that CAT Losses shall not exceed 1.5 times or be less than 0.5 times Planned CAT Losses for the Total P&C Group.

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1.

Purpose. The Kemper Corporation Executive Performance Plan (the “Plan”) is designed to attract and retain the services of selected employees of Kemper Corporation (the “Company”) and its Affiliates who are in a position to make a material contribution to the success of the enterprise. The Plan shall become effective February 4, 2014, subject to approval by shareholders of the provisions of the Plan that are required to be approved by shareholders in accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

2.	Definitions. The following definitions shall apply for purposes of the Plan:

2.1	“Affiliate” means any person or entity controlled directly or indirectly by the Company, whether by equity ownership, contract or otherwise and shall include direct or indirect subsidiaries of the Company and mutual companies the management of which is controlled by the Company and its subsidiaries.

2.2	“Award” means an amount payable to a Participant pursuant to Section 4 of the Plan, including Annual Awards and Multi-Year Awards.

2.3	“Annual Award” means an Award that is earned over one Plan Year, based on the Performance Formula that the Committee establishes for that Plan Year payable to a Participant pursuant to Section 4 of the Plan.

2.4	“Board of Directors” means the Board of Directors of the Company.

2.5	“Compensation Committee” or “Committee” means the Compensation Committee of the Board of Directors.

2.6	“Corporate Performance Measures” means the corporate performance goals upon which the payment of an Award may be conditioned, which are set forth in Exhibit A.

2.7	“Maximum Award Payout” means the actual share of the Bonus Pool designated to a Participant by the Committee for any Performance Period under any Annual Award or Multi-Year Award.

2.8	“Multi-Year Award” means an Award that is earned over more than one Plan Year, based on the Performance Formula that the Committee establishes (i) in the Plan Year the Award is granted or (ii) separately during each Plan Year of the Multi-Year Award, payable to a Participant pursuant to Section 4 of the Plan.

2.9

“Participant” means, for each Performance Period, each employee of the Company or an Affiliate who is a “covered employee” (as defined in Code Section 162(m)) for the last Plan Year within that Performance Period. Notwithstanding anything in the Plan to the contrary, (a) the Committee may, in its sole discretion, specify that an award to an employee of the Company or an Affiliate who is a “covered employee” under another compensation plan sponsored by the Company for a Performance Period be treated as an Award under the Plan.

2.10	“Performance Formula” shall mean, for a Performance Period, the one or more objective, performance-based formulas approved by the Committee under Section 3, which shall be applied against the relevant performance results for the Performance Period to determine, with regard to the Award of each Participant, whether all, some portion, or none of the Award has been earned for the Performance Period.

2.11	“Performance Period” consists of one or more Plan Years applicable to an Award.

2.12	“Plan Year” means a calendar year.

2.13	“Section 162(m)” means, Code Section 162(m), including any proposed or final regulations and other guidance issued thereunder by the U.S. Department of the Treasury and/ or the Internal Revenue Service.

3.	Determination of Bonus Pool.

3.1

Not later than ninety (90) calendar days after the beginning of each Plan Year (or, if longer or shorter, within the maximum period allowed under Section 162(m)), the Committee shall approve in writing one or more Performance Formulas that the Committee expects to create one or more pools of funds (the “Bonus Pool(s)”) that will apply to Awards granted under the Plan. Any Performance Formulas so established by the Committee shall be based on one or more Corporate Performance Measures.

3.2

The Committee may, in its sole discretion, at the time that it determines any Performance Formulas or any time thereafter, adjust any Corporate Performance Measures to exclude the impact of any unusual or non-recurring item the Committee deems not reflective of the Company’s core operating performance, which occurs during a Performance Period including, but not limited to: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting or tax principles, or other laws or provisions affecting reported results; (d) any reorganization, restructuring or discontinued operations; (e) extraordinary nonrecurring items as determined by reference to accounting principles generally accepted in the United States and/or as described in the Company’s reports filed with the Securities and Exchange Commission for periods within the applicable Performance Period; (f) acquisitions or divestitures; (g) catastrophic losses; (h) foreign exchange gains or losses; (i) extraordinary events; (j) financing activities; and (k)

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4.	Awards.

4.1

When the Committee approves the Performance Formulas under which a Bonus Pool will be created for a Plan Year or other Performance Period, the Committee, in its sole discretion, shall assign shares of the Bonus Pool for that Performance Period to those individuals whom the Committee designates as Participants for that Plan Year or other Performance Period; provided that such shares shall not exceed, in the aggregate, one hundred percent (100%) of the Bonus Pool. The actual share of the Bonus Pool designated to a Participant by the Committee for any Performance Period shall be the Participant’s Maximum Award Payout. The Committee’s designation of shares of the Bonus Pool need not be uniform among Participant’s or Plan Years. The Maximum Award Payout to a Participant in any one Plan Year under an Annual Award may not exceed $3,000,000, and the Maximum Award Payout paid to a Participant in any one Plan Year under a Multi-Year Award may not exceed $3,000,000.

4.2

Notwithstanding the provisions of Section 4.1, in determining the actual amount payable to a Participant for a Performance Period the Committee may, in its sole discretion, reduce or eliminate the amount indicated by the Participant’s Maximum Award Payout at any time prior to the payment of an Award to a Participant; provided, however, that in no event shall the exercise of such negative discretion with respect to a Participant result in an increase in the amount payable to another Participant.

4.3	The Committee shall not have the discretion to (a) provide payment or delivery in respect of any Awards for a Performance Period in excess of the Bonus Pool or any Participant’s Maximum Performance Award for such Performance Period, or (b) increase a Participant’s Maximum Award Payout above the limitations set forth in Section 4.1 above.

5.

Eligibility for Payment of Awards. No Participant shall be entitled to payment of an Award hereunder until the Committee certifies in writing the total amount in the Bonus Pool created by achievement of the Performance Formulas for that Performance Period, the Maximum Award Payout for each Participant for the Performance Period, and any other material terms of the Plan have in fact been satisfied. (Such written certification may take the form of minutes of a meeting of the Committee.)

6.1	Award payouts shall be made in cash and may be subject to such additional restrictions as the Committee, in its sole discretion, shall impose.

6.2	Subject to Sections 4 and 5, Awards shall be paid at such time as the Committee may determine, but no later than two and one-half (2½) months after the end of the last Plan Year of the Performance Period.

7.	Administration.

7.1	The Plan shall be administered by the Compensation Committee.

7.2	Subject to the provisions of the Plan, the Committee shall have exclusive power to determine the amounts that shall be available for Awards each Plan Year and to establish the guidelines under which the Awards payable to each Participant shall be determined.

7.3	The Committee’s interpretation of the Plan, grant of any Award pursuant to the Plan, and all actions taken within the scope of its authority under the Plan, shall be final and binding on all Participants (or former Participants) and their executors.

7.4	The Committee shall have the authority to establish, adopt or revise such rules or regulations relating to the Plan as it may deem necessary or advisable for the administration of the Plan.

8.	Amendment and Termination. The Committee may amend any provision of the Plan at any time; provided that no amendment that requires shareholder approval in order for Award payouts made pursuant to the Plan to be deductible under the Code, as amended, may be made without the approval of the shareholders of the Company. The Committee shall also have the right to terminate the Plan at any time.

9.	Miscellaneous.

9.1	The fact that an employee has been designated a Participant shall not confer on the Participant any right to be retained in the employ of the Company or one or more of its Affiliates, or to be designated a Participant in any subsequent Plan Year.

9.2	The Plan shall not be deemed the exclusive method of providing incentive compensation for an employee of the Company and its Affiliates, nor shall it preclude the Committee or the Board of Directors from authorizing or approving other forms of incentive compensation.

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9.3	All expenses and costs in connection with the operation of the Plan shall be borne by the Company and its subsidiaries.

9.4	The Company or Affiliate making a payment under the Plan shall withhold therefrom such amounts as may be required by federal, state or local law, and the amount payable under the Plan to the person entitled thereto shall be reduced by the amount so withheld.

9.5	The Plan and the rights of all persons under the Plan shall be construed and administered in accordance with the laws of the State of Illinois to the extent not superseded by federal law.

9.6

If the Committee so determines, the provisions of the Plan that are subject to shareholder approval in accordance with Section 162(m) shall be submitted for re-approval by the shareholders of the Company no later than the first shareholder meeting that occurs in the fifth (5th) year following the year that shareholders previously approved such provisions following the date of initial shareholder approval, for purposes of exempting certain Awards granted after such time from the deduction limitations of Section 162(m). Nothing in this Section, however, shall affect the validity of Awards granted after such time if such shareholder approval has not been obtained.

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(a)	Net earnings or net income (before or after taxes);

(b)	Operating earnings per share;

(c)	Net sales or revenue growth;

(d)	Operating income and/or average increase in dollars of operating income of the Company or any of its Affiliates or operating units;

(e)	Return measures (including, but not limited to, return on assets, capital, invested capital, investment portfolio performance returns or yields, equity, sales, or revenue);

(f)	Cash flow (including, but not limited to, operating cash flow, free cash flow, and cash flow return on equity);

(g)	Earnings before or after taxes, interest, depreciation, and/or amortization;

(h)	Gross or operating margins;

(i)	Productivity ratios;

(j)	Share price (including, but not limited to, growth measures and total shareholder return);

(k)	Expense targets;

(l)	Margins;

(m)	Operating efficiency;

(n)	Market share;

(o)	Customer satisfaction;

(p)	Working capital targets;

(q)	Bad debt experience;

(r)	Reduction in costs;

(s)	Income from continuing operations, before or after taxes;

(t)	Value returned to shareholders, including or excluding dividends paid or share repurchases;

(u)	Economic value added or EVA® (net operating profit after tax minus the sum of capital multiplied by the cost of capital); and

(v)	Insurance company underwriting income, combined ratios, loss ratios or expense ratios.

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